The horizon recedes again on Indians’ vast royalty claims

Hopes were high this summer when news reports from Washington, D.C., indicated that Congress could be on the verge of settling a long-running lawsuit against the federal government over billions of dollars claimed by Native American landowners across the West.

The suit also returned to the national radar when an appeals court took the highly unusual step of removing the federal judge overseeing the matter, saying he had become too biased in favor of the Indians.

But Congress adjourned for the election season without taking up the $8-billion near-deal outlined by Sen. John McCain (R-Ariz.), chairman of the Indian Affairs Committee. And anger and frustration returned to places like the Blackfeet Indian Reservation, home of Elouise Cobell, the lead plaintiff in the complicated case.

“I’m afraid this whole problem is going to be swept under the rug again,” said Cobell, a banker and rancher here.

“That’s where a lot of the money owed us has been for more than a century.”

At issue are the royalties for oil and gas drilling, mining, logging and grazing on 10 million acres of Indian-owned lands, which the federal government has managed as far back as 1887.

Under the system, the Interior Department calculates and collects these royalties and mails checks to Indian landowners and their descendants.

A 10-year case

The lawsuit has stretched on for 10 years and the title of the case has changed three times, marking the shift in federal Interior secretaries, who are named as the chief defendant: first it was Cobell vs. (Bruce) Babbitt; then Cobell vs. (Gale) Norton; now it’s Cobell vs. (Dirk) Kempthorne.

In that time, the plaintiffs have thrown around plenty of big numbers, arguing at one point that the unpaid royalties plus interest would top $100 billion.

And the federal judge overseeing the case, a conservative Reagan administration appointee, has been blistering in his criticism of the government’s handling of the matter -- so harsh that a federal appeals court this summer removed him from the case, saying he had lost his objectivity.

In a July 2005 opinion, the judge, Royce C. Lamberth, wrote: “Our ‘modern’ Interior Department has time and again demonstrated that it is a dinosaur -- the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government that should have been buried a century ago, the last pathetic outpost of the indifference and anglocentrism we thought we had left behind.”

Even the appeals court that removed Lamberth chastised the Interior Department for its “deplorable record” in managing the royalties. The plaintiffs have filed a motion asking the appeals panel to reconsider its removal of Lamberth.

The judge’s dismissal has caused plenty of discord on the Blackfeet reservation, a windy, chilly expanse of plains and hills in northwestern Montana, just south of the Canadian border and east of Glacier National Park.

“This is a judge who spent a lot of time looking into this fiasco,” said Victor Leonard Sure Chief, 71, a maintenance man taking a break between rounds in Browning, the biggest city on the reservation.

“It seemed to us he was very fair, and look what happens -- they whacked him.”

Sure Chief’s sporadic royalty payments for his family’s land, leased to wheat farmers, range from $200 to about $700.

Recipients average a few thousand dollars a year.

“You never quite know what you’re going to get,” he said.

“Someone’s been making a lot of money off that land, but it’s not us.”

Catherine Marie Salois Hall, 62, who lives in tiny Heart Butte, in the southern tip of the reservation, said she had never really understood how the checks are calculated that show up in her mailbox -- usually a few hundred dollars.

They are for patchwork pieces of land in her family that are leased by mining, ranching and oil interests.

“My late mother told us that someday, something might happen and this land would be really worth something to us,” said Hall.

“But it’s never really happened.”

‘Not holding my breath’

Her brother, Edward Chief All Over, 60, said he wasn’t sure the legal case would ever untangle just how much his family might be owed.

“If somebody puts the money in my hand someday, I guess I’ll believe it. But I’m not holding my breath.”

The royalty system dates to 1887, when Congress passed the Dawes Act, intended to “civilize” the Indians and granting each Indian head of household as much as 320 acres.

But because congressional leaders questioned the Indians’ ability to manage their own affairs, the land was put in trust, with the federal government overseeing royalty payments for its use.

Over the decades, the paternalistic system turned into an accounting mess, with records lost and the government often unable to track descendants entitled to a share of royalty rights.

Original files were eaten by insects, destroyed in fires and floods, and in one case, left inaccessible for years at a New Mexico warehouse because of fears that they might be contaminated with hantavirus from rodent droppings.

The finances were so tangled that in recent years, plaintiffs took to calling their lawsuit the “Indian Enron case.”

In theory, with as many as 500,000 Native American claimants to the royalty payments, an $8-billion settlement could average out to $16,000 per person.

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sam.verhovek@latimes.com